Opinion
No. 30961.
January 8, 1934. Suggestion of Error Overruled February 5, 1934.
1. LANDLORD AND TENANT.
Statute providing that goods shall not be taken from rented premises under process until rent is paid does not give landlord lien on property on leased premises for rent (Code 1930, section 2175).
2. EXECUTORS AND ADMINISTRATORS.
Where estate was insolvent, rent due landlord for store occupied by decedent before death, while claim superior to that of general creditors, was not preferred over claims for expenses of last illness, funeral, and administration, where administrator sold goods in store building under court order (Code 1930, sections 1724, 2175).
APPEAL from Chancery Court of Clay County.
Magruder, Walker Magruder, of Starkville, for appellants.
The administrator of the estate occupied the Starkville store for twenty-eight days during the month of April, 1931, one of the months for which the rent claim of B.M. Walker is probated, the rent for such month being fifty dollars and such amount being exactly half the claim of appellant, B.M. Walker. Even under the contention of appellees such rent claim to the extent of fifty dollars should have been paid as a part of the costs of the administration.
Section 2175, Mississippi Code of 1930 annotated.
The court has held that the landlord has a preference claim for rent against an assignee for the benefit of creditors.
Rice v. Harris, 76 Miss. 422.
The court has held that the landlord has a preference claim for rent against an administratrix, such claim being for rent due prior to the death of the person whose estate was being administered.
Epstein v. Farr, 112 Miss. 530, 73 So. 572; Dabney v. Continental Jewelry Co., 163 Miss. 1, 140 So. 338; Sec. 2175, Mississippi Code of 1930.
At the time of the taking by process there was one thousand ninety-eight dollars and seventy-eight cents in merchandise and fixtures with which to pay Dr. Walker's rent claim for the months of March and April, 1931, and under the statute such funds are a trust fund for the payment of the rent prior to the payment of any other claims.
The minute the receiver took charge of the Starkville store there was a taking by process under the statute and the rent claim of B.M. Walker became a preference claim to be paid out of the first proceeds from the sale of the merchandise of the Starkville store.
Weiss, Dreyfous Seiferth, Inc. et al. v. Natchez Inv. Co., Inc. et al. (Miss.), 140 So. 736; 53 C.J. 249; 24 C.J., p. 433, sec. 1189; Dabney v. Continental Jewelry Co. (Miss.), 140 So. 338.
It is too well established for argument that B.M. Walker, Sr., could not lose his right to follow the merchandise and fixtures by the commingling of such merchandise and fixtures and the proceeds thereof by the administrator with other funds of the administration. Such procedure extends the trust to all funds in the hands of the administrator and creates a preference in favor of the rent claim on all funds of the administration.
Sawyer v. Conner, 114 Miss. 363; Peak v. Elliott, 30 Kan. 159; Edwards v. Lewis (Fla.), 124 So. 746; Paine v. Aberdeen Hotel Co., 60 Miss. 360; Paine v. Sykes, 72 Miss. 351; Citizens Bank v. Kretschmar, 91 Miss. 608, 44 So. 930; Sec. 186, volume 1 of Pomeroy's Equitable Remedies; Sayers Scovill Company v. Doak, 127 Miss. 216, 89 So. 917; 15 American English Annotated cases, p. 386; 16 R.C.L., Landlord and Tenant, sec. 505.
We further submit that the rent claim under section 2175 of the Mississippi Code of 1930 Annotated, in view of the administration, "a taking by process" is a statutory preference claim and under such rent claim prior to the payment of any other claims against the estate, including costs of administration.
McClellan Tubb, of West Point, for appellants.
It would be useless for us to re-argue this case in this brief because such argument would be a duplication of the points argued and presented by Messrs. Magruder, Walker Magruder for appellant, B.M. Walker, Sr., and with the consent of Messrs. Magruder, Walker Magruder, we here adopt as the brief of the argument for the appellant, P.B. Dugan, the argument contained in the brief filed by Messrs. Magruder, Walker Magruder for B.M. Walker, Sr., and respectfully submit that the decree of the chancery court of Clay county, Mississippi, should be reversed and judgment entered in this court declaring the claim of appellant, Pierce B. Dugan, a prior and preference claim to all other claims against said estate.
J.E. Hamlin, of West Point, for appellees.
Section 1724, Code of 1930, after setting out the method of having an estate of a decedent declared insolvent, says: "and the proceeds of such sale and all other assets, shall be equally distributed among all the creditors whose claims shall be duly filed and established, in proportion to the sums due and owing to them respectively, the expense of the last illness, for funeral expense and for administration, including commissions, being first paid, etc." This section deals with insolvent estates of decedents, the exact question before the court herein, and is very plain and concise and clearly places the claims for expenses of illness and for funeral expense above and before all claims of every kind, excepting expense of administration, which is placed on an equal footing.
Section 2175, Code of 1930, holds that one about to remove goods from leased premises must first pay rents, in substance. This section does not give a lien for rents, but does make the rents due, a debt, owed by one about to remove property, if it is removed, and can be collected from him, if he is solvent. If an administrator were to remove goods and dispose of them, this section makes him debtor to the landlord, and if he found that all assets of the estate would not pay these rents, obviously he would have to pay court costs out of the estate and claims here represented are on a parity with claim for court costs.
Frank A. Critz, of West Point, for appellees.
The administrator is not particularly interested in the order of the payment of preferred claims, except to state that there is a universal holding that the costs of an administration, and attorneys' fees for the administrator come first in order of payment out of the assets of an insolvent estate.
Section 1724, Code of 1930, provides for the payment of the expenses of the last sickness, for the funeral, and for the administration being first paid.
Dabney v. Continental Jewelry Co., 140 So. 338; 8 Am. Eng. Enc. of Pleading Practice, p. 1034.
It is unfair and unjust for a landlord to receive the benefits of practically a year's running of the store under the receivership and receiving the rent, and then when the receivership proves unprofitable, and the estate is so insolvent that it cannot pay its preferred creditors, to allow a landlord to come in and say that by virtue of section 2175, he claims a preference to the exclusion of all other preference claims upon all the funds in hand and to the exclusion of the undertaker and the doctor for the expenses of the last sickness. This is a clear case of estoppel.
The sole question in this case is whether, in an insolvent estate, the amount due to a landlord for the rent of a store building occupied by the decedent prior to his death is to be preferred, in the distribution of the estate, over claims for the expenses of the last sickness, for the funeral and for the administration, the administrator having taken over the goods of the decedent in the store building and having sold them all under order of the court.
Appellant, the landlord, relies upon section 2175, Code 1930, which provides that the goods and chattels in rented premises shall not be taken under execution or other process unless all unpaid rent shall first be paid to the landlord; and upon Epstein v. Farr, 112 Miss. 530, 73 So. 572, wherein it was held that the landlord in the case of an insolvent estate had the right to have his claim for rent, in arrears for a storehouse, paid in preference to the general creditors. And appellees rely upon section 1724, Code 1930, which provides that in the distribution of an insolvent estate the expenses of the last sickness, for the funeral and for the administration, including commissions, shall be first paid; and upon Dabney v. Continental Jewelry Co., 163 Miss. 1, 140 So. 338, where it was held that the expenses of the last illness and funeral are preferred over the lien of an enrolled judgment.
If section 2175, Code 1930, gave a specific lien upon the goods and chattels in the leased building, equivalent, for instance, to that of a valid mortgage lien on that specific property, it may be conceded for the sake of the argument that the position of appellant landlord would be maintainable; but in White v. Miazza-Woods Const. Co., 122 Miss. 213, 84 So. 181, and in Engleburg v. Tonkel, 140 Miss. 513, 106 So. 447, it was held that section 2175, Code 1930, which is in substantially the same language as in previous Codes, does not give the landlord a lien on the property on or in the leased premises for his rent. If then, as held in Dabney v. Continental Jewelry Co., supra, the expense of the last sickness, the funeral, and the administration is superior to the lien of an enrolled judgment, it must follow that such expenses are superior to the rent due to a landlord, which is no lien.
The rent due to a landlord for a store from which the administrator has removed or sold the goods is a claim superior in rank to that of general creditors, but is inferior to that to be allowed for the expenses of the last illness, funeral, and administration.
Affirmed.